Jessica LautzMay 18, 2013

Overview of Recent National Association of REALTORS® Research Reports

Profile of Home Buyers and Sellers

• Survey conducted with recent home buyers who purchased a home between July 2011– June 2012

• Seller information gathered from those home buyers who sold a home

• Mailed 93,502 questionnaires• Received 8,501

responses• Response rate of

9.1% • Names obtained from

Experian

Demographic Changes Since 20102010 Profile 2011 Profile 2012 Profile

Median Age 39 45 42

Gross HH Income

$72,200 $80,900 $78,600

Household Composition

58% married couples, 20% single females, 12% single males, 8% unmarried couples

64% married couples, 18% single females, 10% single males, 7% unmarried couples

65% married couples, 16% single females, 9% single males, 8% unmarried couples

Children in Home

35% 36% 41%

Own a 2nd Home

14% 19% 19%

Shift in Household Composition

  2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Married couple 68% 59% 62% 61% 61% 62% 61% 60% 58% 64% 65%Single female 15 21 18 21 22 20 20 21 20 18 16Single male 7 11 8 9 9 9 10 10 12 10 9Unmarried couple 7 8 9 7 7 7 7 8 8 7 8Other 3 1 2 2 1 2 2 1 1 1 2

First-time Buyer Share Closer to Historical Norm

2001 2003 1905 1905 1905 1905 1905 1905 1905 1905 190520%

25%

30%

35%

40%

45%

50%

55%

60%

42%40% 40% 40%

36%39%

41%

47%50%

37%39%

First-time vs. Repeat Buyers

First-time Buyer: Repeat Buyer:

31-years-old 51-years-old

$61,800 $93,100

55% married 72% married

19% single females 14% single females

11% single males 8% single males

14% unmarried couples 5% unmarried couples

42% have children 41% have children

Desire to Own Home Remains Top Reason to Buy

All Buyers

First-time Buyers

Repeat Buyers

Desire to own a home of my own 30% 60% 11%Desire for larger home 11 3 16Job-related relocation or move 9 3 13Change in family situation 8 9 8Affordability of homes 7 11 5Desire to be closer to family/friends/relatives 6 1 9Desire for a home in a better area 6 3 7Retirement 4 1 7Desire for smaller home 4 0 6Desire to be closer to job/school/transit 4 2 5

Timing of Buyers Recent Home Purchase

All Buyers First-time Buyers Repeat BuyersIt was just the right time, the buyer was ready to buy a home

37% 43% 34%

It was the best time because of affordability of homes

19 22 17

Did not have much choice, had to purchase

14 9 18

It was the best time because of mortgage financing options available

12 16 10

It was the best time because of availability of homes for sale

7 5 8

No New Homes to Buy

What homes are being sold?

Typical Home:• Detached single-family home• 3 beds/2 baths• 1,900 square feet• $100/square foot• Built in 1992• Suburban-51%, Small town-18%,

Urban/Central city-17%, Rural-12%• 11 miles from previous home

Check out: Profile of Buyer’s Home Feature Preferences

• While more than three-fourths – 78 percent – of all buyers purchased a home with a garage, garages were more popular among new-home buyers, Midwesterners, and suburbanites.

• Forty-one percent of homes purchased had a basement, but this feature was more popular among buyers in the Midwest and Northeast.

• Among all 33 home features in the survey, central air conditioning was the most important to the most buyers; 65 percent of buyers considered this feature very important.

2013 Profile of Buyers’ Home Features Preferences

Location, Location, Location

• Quality of the neighborhood

• Convenient to job• Overall affordability of

homes• Convenient to

friends/family• Design of

neighborhood• Convenient to

shopping• Quality of school

district

Commuting Costs

Environmentally Friendly Features

Compromises on Home Purchase

First-time Buyers

Repeat Buyers

Price of Home 19% 16%

Size of Home 20 14

Condition of Home

16 16

Lot Size 14 12

Style of Home 14 12

Distance from Job

16 10

Increased Purchases in Senior-related Housing

 All buyers

over 50Share who purchased a home in senior-related housing 14%

Among buyers over 50 who purchased senior related housingType of home purchased:   Detached single-family home 63% Townhouse/row house 8 Apartment/condo in building with 5 or more units 12 Duplex/apartment/condo in 2 to 4 unit building 7 Other 11Location:   Suburb/ Subdivision 45% Small town 21 Urban/ Central city 10 Rural area 7 Resort/ Recreation area 17

Expected Tenure Remains HighAGE OF HOME BUYER

All Buyers 18 to 24 25 to 44 45 to 64 65 or older

1 year or less 1% 2 1% 1% 2%2 to 3 years 2 2 2 1 24 to 5 years 7 14 10 4 26 to 7 years 2 1 4 1 08 to 10 years 13 17 15 12 911 to 15 years 6 8 5 5 716 or more years 26 18 27 32 18Don't Know 43 39 37 43 61

Median 15 10 12 20 15

Actual Tenure Among Sellers Remains High

2003 2004 2005 2006 2007 2008 2009 2010 2011 20120123456789

10

6 6 6 6 6 67

89 9

Tightened Inventory Affecting Home Search

• Buyers saw 10 homes before buying-drop from 12 homes

• Typically look for 12 weeks total and 3 weeks before contacting an agent

• 51% of buyers reported hardest task is in process was finding the right home

Agent Use By Buyers & Sellers Remains High

• 89% of buyers purchased their home through a real estate agent or broker-up from 69% in 2001– Most want help finding right home– Benefited from help understanding the process– High importance on honesty and integrity

• 88% of sellers were assisted by an agent-up from 77% in 1991– Sell w/in specific timeframe– Help market home– Find a buyer for the home– Reputation and honesty and integrity important

Agent Assisted Sales High

1991

1993

1995

1997

1999

2001

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

0

10

20

30

40

50

60

70

80

90

100

19 17 15 18 16 13 14 14 13 12 12 13 11 9 10 9

77 82 81 80 77 79 83 82 85 84 85 84 85 88 87 88

4 1 4 4 7 8 4 4 2 3 3 3 4 3 3 2

All FSBO (For-sale-by-owner) Agent-assistedOther

Reasons Behind Selling as FSBO

• Among the 9% of FSBOs– One-third knew the buyer – Two-thirds did not know the buyer

• For FSBO sellers who did not know the buyer– 20% were contacted by a buyer they did not know

asking to buy home increase from 15 percent in 2010

FSBO Selling Market

All Sellers

All FSBO

Seller Knew Buyer

Seller did not Know Buyer

All Agent-

assisted

Agent-assisted

only

First FSBO, then

Agent-assisted

Median selling price

$210,000

$174,900

$151,600

$191,600

$215,000

$215,000

$175,000

Median (sales price as a percent of asking price)

95% 97% 100% 96% 95% 95% 92%

Percent who reduced asking price 60% 50% 34% 59% 61% 61% 81%

Referrals Matter

• Both buying and selling side:– More than 50% found agent through a referral or

had used agent before– 2/3’s only contact 1 agent during buying/selling

process– More than 8 in 10 would use agent again or

recommend to others

Seller Demographics

• Typical seller looks like:– 53 years old– Median HH income of $95,400– 76% are married, 19% single – 40% have children in the home– 93% are white/Caucasian– 66% are repeat sellers

Seller Change

• Moving motivations:– Job

relocation– Home too

small– Closer to

friends/family

– Neighborhood less desirable

– Change in family situation

– Home too large

Satisfaction in Selling Process

The Search Process

Use of the Internet Increased

• More than ½ of buyers starting home search online

• Real estate related searched on Google.com have grown 253% over the past 4 years

Internet Searchers Use All Search Methods More

Agents Still Central to Search

Search Engines Play a Critical Role

• Shoppers will perform an average of 11 searches prior to taking action on a real estate site

• Home shoppers using search engines are 9% more likely to take an action on a real estate brand website than those who do not search

• 69% of home shoppers who take action on a real estate brand website begin their research with a local term, i.e. “Houston homes for sale” on a search engine

• 78% of new home shoppers visit 3 + sites prior to taking action on a real estate site

Video Usage for Home Shoppers

Age Gap with Members and Searchers Taking Action

Actions Taken from Viewing Homes Online

Satisfaction in Buying Process

• Educational achievement

• Civic participation• Health benefits• Crime• Public assistance • Property maintenance

and improvement

Social Benefits of Homeownership and Stable Housing

REALTORS® Confidence Index

• The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners.

• Practitioners are asked about their expectations for home sales, prices and market conditions.

• In addition, the "Questions of the Month," feature results of the most current issue facing the housing market.

REALTOR Confidence Index: Distressed Properties

• The share of distressed properties on the market continued to decline. About 21 percent of REALTORS® reporting on their last sale in March sold distressed properties, compared to approximately 40 percent in March 2011.

• Distressed sales are mostly sold for cash. Distressed sales accounted for 35 percent of cash sales compared to 21 percent of mortgage sales.

REALTORS® Confidence Index: Home Price Expectations

• With strong buyer demand and tight inventory, REALTORS® were generally upbeat about price trends in the coming months. Approximately 94 percent of REALTORS® who responded to the March REALTORS® Confidence Index (RCI) Survey expected constant or increasing prices in the next 12 months.

• The graph shows by state the median expected price changes within the next 12 months based on responses to the March 2013 Survey. Price expectations are most upbeat in the West region where inventory is very low, in Texas, Florida, and Georgia where prices are recovering, and in strong growth states such as Virginia.

REALTORS® Confidence Index: Price Discount by Property Type

• Distressed property sold at a discount of between 12 to 35 percent of the market value depending on property conditions over the past year, based on information from the March REALTORS® Confidence Index Survey.

• Not surprisingly, the price discount is affected by the property condition: properties in the poorest condition are discounted at twice the rate of those with above average condition.

• Currently, about 21 percent of Existing Home Sales are distressed properties.

REALTORS® Confidence Index: Time on Market

• Multiple bidding in a low inventory environment continues to lead to shorter days on the market.

• About 37 percent of REALTORS® reported that in March recently sold properties were on the market for less than a month when sold compared to 27 percent in the same month last year.

• The percentage of REALTORS® reporting that the house sold had been on the market for 6 months or more is down to 20 percent from 28 percent a year ago. 

REALTORS® Confidence Index: Median Days on Market

• Tight inventory has led to shorter time on the market.

• The median days on the market fell to 62 days in March (74 in February). Short sales had the longest days on market at 81 days (101 days in February), while foreclosures were on the market for 46 days (52 days in February).

• The median days on the market for non-distressed properties was 66 days (77 days in February).

Where to find NAR Research

• Jessica Lautz: jlautz@realtors.org, 202-383-1155

• NAR Research www.realtor.org/research-and-statistics

• Economists’ Outlook Blog: economistsoutlook.blogs.realtor.org

• FaceBook: facebook.com/narresearchgroup• Twitter: twitter.com/NAR_Research

Realtor.org Research Page

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Additional Reports from NAR Research

• Rise in number of transaction sides to 12 from 10 in 2011.

• Sales volume among members rose from $1.3 million to $1.5 million.

• Eight in 10 members expect to remain active in real estate for the next two years, indicating increased optimism in real estate.

• For the 3rd year in a row, difficulty in obtaining mortgage financing was most cited reason for potential clients being limited.

Positive Changes for Members in 2013 Member Profile

Cash Purchases Still High Among Investment/Vacation

Buyers• 24 percent of buyers purchased an

investment property and 11 percent of buyers purchased a vacation home.

• The share of vacation buyers who did not use a mortgage was 46 percent.

• Half of investment buyers paid cash in 2012.

• Vacation buyers expect to own their vacation home for 10 years.

International Clients: They Come To Buy

• In 2012 there was a total of $82 billion internationally oriented sales, up from $66 billion reported in 2010.

• Twenty-eight percent of REALTORS® reported experience with an international client.

• Approximately 61 percent of international purchasers bought single family detached homes

Local Market Reports Real Estate is Local!

• These Local Market Reports (LMRs) reflect data available through the first quarter of 2013 and are for members only.

• Provide insights into the fundamentals and direction of the nation's 155 largest metropolitan housing markets.

• Free, downloadable reports that evaluatea number of factors affecting home prices, including:

• The health of the local job market• Foreclosure rates• Inventory• And much more!

Relocation Reports On the Move

• NAR Research has produced a total of 3,147 Relocation Reports for U.S. counties.

• The report for each county presents information for that county on: County‐to‐county migration flows

within the United States

Average incomes of households moving between the specific county and other counties

Demographic summaries of homeownership rates, and types of home mortgages (e.g., Conventional, FHA, VA, and FSA/RHS)

• Commercial members typically have been in real estate for 25 years, in commercial real estate for 15 years, and members of NAR for 17 years.

• Investment sales are the most cited primary specialty of commercial members and is the top ranked secondary specialty area.

• Commercial members completed a median of eight transactions in 2012.

Commercial Members: Expertise in Variety of Transactions Across

Many Property Types

• NAR’s flagship commercial real estate publication

• Available quarterly

• Looks at multi-family, office, retail, and industrial sectors

• Available at www.realtor.org/research -- go to Reports by Topic and Click on Commercial

Commercial Real Estate Outlook